1

POM-2

Set-6

Quality Management
(SPC & SQC)
 2

OBJECTIVES
­ Total Quality Management Defined
­ Quality Specifications and Costs

­ Six Sigma Quality and Tools

­ External Benchmarking

­ ISO 9000

­ Service Quality Measurement

 3

Total Quality Management (TQM)

­ Total quality management is

defined as managing the entire
organization so that it excels on
all dimensions of products and
services that are important to the
customer
 4

Quality Specifications

­ Design quality: Inherent value of the

product in the marketplace
– Dimensions include: Performance,
Features, Reliability/Durability,
Serviceability, Aesthetics, and
Perceived Quality.
­ Conformance quality: Degree to which
the product or service design
specifications are met
 5

Costs of Quality

Appraisal Costs
Costs of Control

External Failure Costs of

Costs Quality Prevention Costs

Costs of failure of
Control Internal Failure
Costs
 6

Six Sigma Quality

­ A philosophy and set of
methods companies use
to eliminate defects in
their products and
processes
­ Seeks to reduce variation in
the processes that lead
to product defects
­ The name, “six sigma”
refers to the variation
that exists within plus or
minus three standard
deviations of the process
outputs
 7

Six Sigma Quality (Continued)

­ Six Sigma allows managers to readily describe
process performance using a common
metric: Defects Per Million Opportunities
(DPMO)

Number
of defects
DPMO = x1,000,000
 Number of 
 opportunit
ies xNo.of units
 forerrorper 
 unit 
 
 8

Six Sigma Quality (Continued)

Example of Defects Per Million
 So,
So,for
forevery
everyone
one
Opportunities (DPMO) calculation. million
millionletters
letters
delivered
deliveredthis
this
Suppose we observe 200 letters city’s
delivered incorrectly to the wrong city’spostal
postal
managers
managerscan can
addresses in a small city during a expect
expecttotohave
have
single day when a total of 200,000 1,000
1,000letters
letters
letters were delivered. What is the incorrectly
incorrectlysent
sent
to the wrong
to the wrong
DPMO in this situation? address.
address.

200
DPMO = = 1, 000
x1,000,000
[ 1] x200,000

Cost
Cost of
of Quality:
Quality:What
Whatmight
mightthat
that DPMO
DPMO mean
mean in
in terms
terms
of
of over-time
over-timeemployment
employmentto
tocorrect
correct the
theerrors?
errors?
 9

Six Sigma Quality: DMAIC Cycle

­ Define, Measure, Analyze, Improve, and Control
(DMAIC)
­ Developed by General Electric as a means of
focusing effort on quality using a
methodological approach
­ Overall focus of the methodology is to understand
and achieve what the customer wants
­ A 6-sigma program seeks to reduce the variation
in the processes that lead to these defects
­ DMAIC consists of five steps….
 10

Six Sigma Quality: DMAIC Cycle

(Continued)
1. Define (D) Customers and their priorities

2. Measure (M) Process and its performance

3. Analyze (A) Causes of defects

4. Improve (I) Remove causes of defects

5. Control (C) Maintain quality

 11

Example to illustrate the

process…

­ We are the maker of this cereal.

Consumer reports has just
published an article that shows that
we frequently have less than 15
ounces of cereal in a box.
­ What should we do?
 12

Step 1 - Define

­ What is the critical-to-quality

characteristic?
­ The CTQ (critical-to-quality)
characteristic in this case is the
weight of the cereal in the box.
 13

2 - Measure

­ How would we measure to evaluate

the extent of the problem?
­

­ What are acceptable limits on this

measure?
 14

2 – Measure (continued)

­ Let’s assume that the government

says that we must be within ± 5
percent of the weight advertised on
the box.
­ Upper Tolerance Limit = 16 + .05(16)
= 16.8 ounces
­ Lower Tolerance Limit = 16 – .05(16)
= 15.2 ounces
 15

2. Measure (continued)

­ We go out and buy 1,000 boxes of

cereal and find that they weight an
average of 15.875 ounces with a
standard deviation of .529 ounces.
­ What percentage of boxes are
outside the tolerance limits?
 16

Process
Lower Tolerance Mean = 15.875 Upper Tolerance
= 15.2 Std. Dev. = .529 = 16.8

What percentage of boxes are defective (i.e. less than 15.2 oz)?

Z = (x – Mean)/Std. Dev. = (15.2 – 15.875)/.529 = -1.276

NORMSDIST(Z) = NORMSDIST(-1.276) = .100978

Approximately, 10 percent of the boxes have less than 15.2

Ounces of cereal in them!
 17

Step 3 - Analyze - How can we

improve the capability of our cereal
box filling process?

–Decrease Variation
–Center Process
–Increase
Specifications
 18

Step 4 – Improve – How good is good enough?

Motorola’s “Six Sigma”

– 6σ minimum from process

center to nearest spec
12σ

6σ

3 2 1 0 1 2 3
 19

Motorola’s “Six Sigma”

­ Implies 2 ppB “bad” with no process shift

­ With 1.5σ shift in either direction from
center (process will move), implies 3.4
ppm “bad”.
12σ

3 2 1 0 1 2 3
 20

Step 5 – Control
­ Statistical Process Control (SPC)
– Use data from the actual
process
– Estimate distributions
– Look at capability - is good
quality possible
– Statistically monitor the process
over time
­

–
 21

Analytical Tools for Six Sigma and Continuous

Improvement: Flow Chart
Material
No,
Received Continue…
from Inspect
Supplier Material for Defects
Defects found?

Yes

Can
Canbebeused
usedto
to
find
findquality
quality Return to
problems
problems Supplier
for Credit
 22

Analytical Tools for Six Sigma and Continuous

Improvement: Run Chart
Can
Canbebeused
usedtotoidentify
identify
when
whenequipment
equipmentor or
processes
processesarearenot
not
behaving
behavingaccording
accordingtoto
specifications
Diameter

specifications
0.58
0.56
0.54
0.52
0.5
0.48
0.46
0.44
1 2 3 4 5 6 7 8 9 10 11 12
Time (Hours)
 23

Analytical Tools for Six Sigma and Continuous

Improvement: Pareto Analysis

Can
Can be be used
used 80%

to
to find
find when
when
80%
80% of of the
the
problems
problems Frequency
may
may be be
attributed
attributed to to
20%
20% of of the
the
causes
causes

Design Assy. Purch. Training

Instruct.
 24

Analytical Tools for Six Sigma and

Continuous Improvement: Checksheet

Can
Canbebeused
usedtotokeep
keeptrack
trackof
of
defects
defectsor
orused
usedtotomake
makesure
sure
people
peoplecollect
collectdata
datain
inaacorrect
correct
Monday manner
manner
Billing Errors

Wrong Account

Wrong Amount

A/R Errors

Wrong Account

Wrong Amount
 25

Analytical Tools for Six Sigma and

Continuous Improvement: Histogram

Can
Canbebeused
usedto
toidentify
identifythe
thefrequency
frequencyof ofquality
quality
Number of Lots

defect
defectoccurrence
occurrenceand
anddisplay
displayquality
quality
performance
performance

0 1 2 3 4 Defects
Data Ranges in lot
 26

Analytical Tools for Six Sigma and

Continuous Improvement: Cause & Effect
Diagram

Possible
Possible causes:
causes: The
Theresults
results
or
or effect
effect
Machine Man

Environment Effect

Method Material

Can
Canbebeused
usedto
tosystematically
systematicallytrack
trackbackwards
backwardsto
to
find
findaapossible
possiblecause
causeof
ofaaquality
qualityproblem
problem(or
(or
effect)
effect)
 27

Analytical Tools for Six Sigma and Continuous

Improvement: Control Charts

Can
Canbebeused
usedto
tomonitor
monitorongoing
ongoingproduction
productionprocess
process
quality
qualityand
andquality
qualityconformance
conformanceto
tostated
statedstandards
standardsof
of
quality
quality

1020
UCL
1010
1000
990
LCL
980
970
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
 28

Other Six Sigma Tools

­ Failure Mode and Effect Analysis (DMEA)
is a structured approach to identify,
estimate, prioritize, and evaluate risk of
possible failures at each stage in the
process
­ Design of Experiments (DOE) a statistical
test to determine cause-and-effect
relationships between process variables
and output
 29

Six Sigma Roles and

Responsibilities
1.Executive leaders must champion
the process of improvement
2.Corporation-wide training in Six
Sigma concepts and tools
3.Setting stretch objectives for
improvement
4.Continuous reinforcement and
rewards
­
 30

The Shingo System: Fail-Safe Design

­ Shingo’s argument:
– SQC methods do not prevent defects
– Defects arise when people make errors
– Defects can be prevented by providing
workers with feedback on errors

­ Poka-Yoke includes:
– Checklists
– Special tooling that prevents workers
from making errors
 31

ISO 9000
­ Series of standards agreed upon by the
International Organization for
Standardization (ISO)
­ Adopted in 1987
­ More than 100 countries
­ A prerequisite for global competition?
­ ISO 9000 directs you to "document
what you do and then do as you
documented"
 32

Three Forms of ISO Certification

1. First party: A firm audits itself against
ISO 9000 standards
2. Second party: A customer audits its

supplier
3. Third party: A "qualified" national or

international standards or certifying

agency serves as auditor
 33

External Benchmarking Steps

1. Identify those processes needing

improvement
2. Identify a firm that is the world leader

in performing the process

3. Contact the managers of that company

and make a personal visit to interview

managers and workers
4. Analyze data
 34

Service Quality Measurement:Servqual

­ A perceived service quality
questionnaire survey methodology


­ Examines “Dimensions of Service

Quality” including: Reliability,
Responsiveness, Assurance,
Empathy, and Tangibles (e.g.,
appearance of physical facilities,
equipment, etc.)
 35

Service Quality Measurement:

Servqual (Continued)
­ New version of this methodology is called “e-
Service Quality” dealing service on the Internet
­ Dimensions of Service Quality on the e-Service
methodology include: Reliability,
Responsiveness, Access, Flexibility, Ease of
Navigation, Efficiency, Assurance/Trust,
Security/Privacy, Price Knowledge, Site
Aesthetics, and Customization/Personalization
 36

Question Bowl

 Which of the following are

Dimensions of Design Quality?
a.Performance
b.Durability
c.Aesthetics
d.All of the above
e.None of the above
Answer: d. All of the above
 37

Question Bowl

Approximately what percentage of



every sales dollar is allocated to

the “cost of quality”?
a.Less than 5%
b.About 10%
c.Between 15 and 20 %
d.More than 30%
e.None of the above
Answer: c. Between 15 and 20 % (for cost of
reworking, scrapping, repeated service, etc.)
 38

Question Bowl

 Which of the following are

classifications of the “cost of
quality”?
a.Appraisal costs
b.Prevention costs
c.Internal failure costs
d.External failure costs
e.All of the above
Answer: e. All of the above
 39

Question Bowl
 Which of the following are functions of
a quality control department?
a. Testing product designs for reliability
b.Gathering product performance data
c. Planning and budgeting the QC
program
d.All of the above
e. None of the above

Answer: d. All of the above

 40

Question Bowl
 Which of the following is a Critical
Customer Requirement (CCR) in the
context of a Six Sigma program?
a. DMAIC
b.DPMO
c. PCDA Answer: e. None of the
d.DOE above (The CCR is the
e. None of the above criteria that is used to
define desired quality.
Processing a loan in 10
days is an example of a
CCR.)
 41

Question Bowl

 The DMAIC cycle of Six Sigma is

similar to which of the following
quality management topics?
a.Continuous improvement
b.Servqual
c.ISO 9000
d.External benchmarking
e.None of the above
Answer: a. Continuous improvement
 42

Question Bowl

The “A” in DMAIC stands for which of



the following?
a.Always
b.Accessibility
c.Analyze
d.Act
e.None of the above
Answer: d. Analyze (Define, Measure,
Analyze, Improve and Control)
 43

Question Bowl
 Which of the following analytical
tools depict trends in quality data
over time?
a.Flowcharts
b.Run charts
c.Pareto charts
d.Checksheets
e.Cause and effect diagrams
Answer: b. Run charts
 44

 References:
­ Operations Management for Competitive Advantage by
Richard B. Chase, F. Robert Jacobs, Nicholas J. Aquilano,
and Nitin K Agarwal; Tata McGraw-Hill (Eleventh Edition;
Sixth Reprint 2008)
 45

Technical Note 8
Process Capability and
Statistical Quality Control
 46

OBJECTIVES
­ Process Variation
­ Process Capability
­ Process Control Procedures
– Variable data
– Attribute data
­ Acceptance Sampling
ONLY
– Operating Characteristic Curve IF TIME
PERMITS
 47

Basic Forms of Variation

Assignable variation


is caused by Example:
Example:AApoorly
poorlytrained
trained
factors that can be employee
employeethat
thatcreates
createsvariation
variation
in finished product output.
clearly identified in finished product output.

and possibly
managed

Common variation is Example:

Example:AAmolding
moldingprocess
process
inherent in the that
thatalways
alwaysleaves
leaves“burrs”
“burrs”oror
production process flaws
flawson
onaamolded
moldeditem.
item.
 48

Taguchi’s View of Variation

Traditional
Traditionalview
viewisisthat
thatquality
qualitywithin
withinthe
theLS
LSand
andUS
USisisgood
goodand
andthat
thatthe
the
cost
costof
ofquality
qualityoutside
outsidethis
thisrange
rangeisisconstant,
constant,where
whereTaguchi
Taguchiviews
viewscosts
costsas
as
increasing
increasingas
asvariability
variabilityincreases,
increases,so
soseek
seekto
toachieve
achievezero
zerodefects
defectsand
andthat
that
will
willtruly
trulyminimize
minimizequality
qualitycosts.
costs.

High High

Incremental Incremental
Cost of Cost of
Variability Variability

Zero Zero

Lower Target Upper Exhibits Lower Target Upper

Exhibits
Spec Spec Spec TN8.1 Spec Spec Spec
TN8.1&&
TN8.2
TN8.2
Traditional View Taguchi’s View
 49

Process Capability

­ Process limits
­ Specification limits
­ How do the limits relate to one another?
 50

Process Capability Index, Cpk

Capability
CapabilityIndex
Indexshows
showshow
how
well
wellparts
partsbeing
beingproduced
producedfit fit  X − LTL UTL - X 
into
intodesign
designlimit
limitspecifications.

specifications. C pk = min 3σ or 
3σ 
 

As
Asaaproduction
productionprocess
process
produces
producesitems
itemssmall
small
shifts
shiftsin
inequipment
equipmentor or
systems
systemscan
cancause
cause
differences
differencesinin
production
production
performance
performancefrom from
differing
differingsamples.
samples.
Shifts in Process Mean
 51

Process Capability – A Standard Measure of

How Good a Process Is.

 A simple ratio:
 Specification Width
 _________________________________________________________

 Actual “Process Width”



 Generally, the bigger the better.

 52

Process Capability

 X − LTL UTL − X 
C pk = Min  ; 
 3σ 3σ 

This is a “one-sided” Capability Index



 Concentration on the side which is closest to

the specification - closest to being “bad”

 53

The Cereal Box Example

­ We are the maker of this cereal. Consumer reports
has just published an article that shows that we
frequently have less than 15 ounces of cereal in a
box.
­ Let’s assume that the government says that we
must be within ± 5 percent of the weight
advertised on the box.
­ Upper Tolerance Limit = 16 + .05(16) = 16.8 ounces
­ Lower Tolerance Limit = 16 – .05(16) = 15.2 ounces
­ We go out and buy 1,000 boxes of cereal and find
that they weight an average of 15.875 ounces with
a standard deviation of .529 ounces.
­
 54

Cereal Box Process Capability

­ Specification or
Tolerance Limits  X − LTL UTL − X 
– Upper Spec = 16.8 C
ozpk = Min ; 
– Lower Spec = 15.2 oz  3σ 3σ 
­ Observed Weight
– Mean = 15.875 oz 15.875 − 15.2 16.8 − 15.875 
– Std Dev = .529 oz C pk = Min  ; 
 3(.529) 3(.529) 

C pk = Min{.4253; .5829}

C pk = .4253
 55

What does a Cpk of .4253 mean?

­ An index that shows how well the units

being produced fit within the
specification limits.
­ This is a process that will produce a

relatively high number of defects.

­ Many companies look for a Cpk of 1.3 or

better… 6-Sigma company wants 2.0!

­
 56

Types of Statistical Sampling

­ Attribute (Go or no-go information)
– Defectives refers to the acceptability of
product across a range of characteristics.
– Defects refers to the number of defects per
unit which may be higher than the number
of defectives.
– p-chart application

­ Variable (Continuous)
– Usually measured by the mean and the
standard deviation.
– X-bar and R chart applications
Statistical
57
UCL

Process Normal
NormalBehavior
Behavior
Control
(SPC) Charts LCL

1 2 3 4 5 6 Samples
over time
UCL

Possible
Possibleproblem,
problem,investigate
investigate

LCL

1 2 3 4 5 6 Samples
over time
UCL

Possible
Possibleproblem,
problem,investigate
investigate

LCL

1 2 3 4 5 6 Samples
over time
 58

Control Limits are based on the

Normal Curve

x
µ
z
-3 -2 -1 0 1 2 3

Standard
Standard
deviation
deviationunits
units
or
or“z”
“z”units.
units.
 59

Control Limits
We establish the Upper Control Limits (UCL) and


the Lower Control Limits (LCL) with plus or minus

3 standard deviations from some x-bar or mean
value. Based on this we can expect 99.7% of our
sample observations to fall within these limits.

99.7%
x
LCL UCL
 60

Example of Constructing a p-Chart:

Required Data
Sample No. of Number of
defects found
No. Samples in each sample
1 1
00 4
2 1
00 2
3 1
00 5
4 1
00 3
5 1
00 6
6 1
00 4
7 1
00 3
8 1
00 7
9 1
00 1
1
0 1
00 2
1
1 1
00 3
1
2 1
00 2
1
3 1
00 2
1
4 1
00 8
1
5 1
00 3
 61

Statistical Process Control Formulas:

Attribute Measurements (p-Chart)

Given: Total Numb er of Defe ctives

p=
Total Numb er of Obse rvations

p (1 - p)
sp =
n
Compute control limits:

UCL = p + z sp
LCL = p - z sp
 62

Example of Constructing a p-chart:

Step 1
Sample n Defectives p
1.
1. Calculate
Calculate the
the 1 100 4 0.04
sample
sample proportions,
proportions, 2 100 2 0.02
pp (these
(these are
are what
what 3 100 5 0.05
4 100 3 0.03
can
can bebe plotted
plotted onon 5 100 6 0.06
the
the p-chart)
p-chart) for
for each
each 6 100 4 0.04
sample
sample 7 100 3 0.03
8 100 7 0.07
9 100 1 0.01
10 100 2 0.02
11 100 3 0.03
12 100 2 0.02
13 100 2 0.02
14 100 8 0.08
15 100 3 0.03
 63

Example of Constructing a p-chart:

Steps 2&3
2.
2. Calculate
Calculate the
the average
average of
of the
the sample
sample proportions
proportions

55
p= = 0.036
1500
3.
3. Calculate
Calculate the
the standard
standard deviation
deviation of
of the
the
sample
sample proportion
proportion

p (1 - p) .036(1 - .036)
sp = = = .0188
n 100
 64

Example of Constructing a p-chart:

Step 4
4.
4. Calculate
Calculate the
the control
control limits
limits

UCL = p + z sp
LCL = p - z sp

.036 ± 3(.0188)
UCL
UCL == 0.0924
0.0924
LCL
LCL == -0.0204
-0.0204 (or
(or 0)
0)
 65

Example of Constructing a p-Chart: Step 5

5.
5. Plot
Plotthe
theindividual
individualsample
sampleproportions,
proportions,the
theaverage
average
of
ofthe
theproportions,
proportions,and
andthe
thecontrol
controllimits
limits
0.16

0.14

0.12

0.1

p
0.08
UCL
0.06

0.04

0.02

0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Observation

LCL
 66

Example of x-bar and R Charts:

Required Data
Sample Obs 1 Obs 2 Obs 3 Obs 4 Obs 5
1 10.68 10.689 10.776 10.798 10.714
2 10.79 10.86 10.601 10.746 10.779
3 10.78 10.667 10.838 10.785 10.723
4 10.59 10.727 10.812 10.775 10.73
5 10.69 10.708 10.79 10.758 10.671
6 10.75 10.714 10.738 10.719 10.606
7 10.79 10.713 10.689 10.877 10.603
8 10.74 10.779 10.11 10.737 10.75
9 10.77 10.773 10.641 10.644 10.725
10 10.72 10.671 10.708 10.85 10.712
11 10.79 10.821 10.764 10.658 10.708
12 10.62 10.802 10.818 10.872 10.727
13 10.66 10.822 10.893 10.544 10.75
14 10.81 10.749 10.859 10.801 10.701
15 10.66 10.681 10.644 10.747 10.728
 67

Example of x-bar and R charts: Step 1. Calculate

sample means, sample ranges, mean of means,
and mean of ranges.
Sample Obs 1 Obs 2 Obs 3 Obs 4 Obs 5 Avg Range
1 10.68 10.689 10.776 10.798 10.714 10.732 0.116
2 10.79 10.86 10.601 10.746 10.779 10.755 0.259
3 10.78 10.667 10.838 10.785 10.723 10.759 0.171
4 10.59 10.727 10.812 10.775 10.73 10.727 0.221
5 10.69 10.708 10.79 10.758 10.671 10.724 0.119
6 10.75 10.714 10.738 10.719 10.606 10.705 0.143
7 10.79 10.713 10.689 10.877 10.603 10.735 0.274
8 10.74 10.779 10.11 10.737 10.75 10.624 0.669
9 10.77 10.773 10.641 10.644 10.725 10.710 0.132
10 10.72 10.671 10.708 10.85 10.712 10.732 0.179
11 10.79 10.821 10.764 10.658 10.708 10.748 0.163
12 10.62 10.802 10.818 10.872 10.727 10.768 0.250
13 10.66 10.822 10.893 10.544 10.75 10.733 0.349
14 10.81 10.749 10.859 10.801 10.701 10.783 0.158
15 10.66 10.681 10.644 10.747 10.728 10.692 0.103

Averages 10.728 0.220400

 68

Example of x-bar and R charts: Step 2. Determine Control

Limit Formulas and Necessary Tabled Values

From
FromExhibit
ExhibitTN8.7
x Chart Con trol Limits TN8.7

n A2 D3 D4
UCL = x + A 2 R 2 1.88 0 3.27
3 1.02 0 2.57
LCL = x - A 2 R 4 0.73 0 2.28
5 0.58 0 2.11
6 0.48 0 2.00
R Chart Control Limits 7 0.42 0.08 1.92
8 0.37 0.14 1.86
UCL = D 4 R 9 0.34 0.18 1.82
10 0.31 0.22 1.78
LCL = D 3 R 11 0.29 0.26 1.74
 69

Example of x-bar and R charts: Steps 3&4. Calculate

x-bar Chart and Plot Values

UCL = x + A 2 R = 10.728 - .58(0.2204) = 10.856

LCL = x - A 2 R = 10.728 - .58(0.2204) = 10.601
10.900

10.850 UCL

10.800

10.750
M eans

10.700

10.650

10.600
LCL
10.550
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Sample
 70
Example of x-bar and R charts: Steps 5&6. Calculate
R-chart and Plot Values
UCL = D4 R = ( 2.11)(0.2204) = 0.46504
LCL = D3 R = (0)(0.2204) = 0

0.800

0.700

0.600

0.500
UCL
R 0.400

0.300

0.200

0.100
LCL
0.000
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Sample
 71

Basic Forms of Statistical Sampling for

Quality Control

­ Acceptance Sampling is sampling

to accept or reject the immediate
lot of product at hand
­ Statistical Process Control is
sampling to determine if the
process is within acceptable
limits
 72

ONLY
Acceptance Sampling IF TIME
PERMITS
­ Purposes
– Determine quality level
– Ensure quality is within predetermined
level
­ Advantages
– Economy
– Less handling damage
– Fewer inspectors
– Upgrading of the inspection job
– Applicability to destructive testing
– Entire lot rejection (motivation for
improvement)
 73

Acceptance Sampling (Continued)

­ Disadvantages
– Risks of accepting “bad” lots and
rejecting “good” lots
– Added planning and documentation
– Sample provides less information
than 100-percent inspection
 74

Acceptance Sampling:
Single Sampling Plan

A simple goal


Determine (1) how many units, n,

to sample from a lot, and (2) the
maximum number of defective
items, c, that can be found in the
sample before the lot is rejected
 75

Risk
­ Acceptable Quality Level (AQL)
– Max. acceptable percentage of defectives
defined by producer
­ The α (Producer’s risk)
– The probability of rejecting a good lot
­ Lot Tolerance Percent Defective (LTPD)
– Percentage of defectives that defines
consumer’s rejection point
­ The  (Consumer’s risk)
– The probability of accepting a bad lot
 76
Operating Characteristic Curve
The
TheOCC
OCCbrings
bringsthe
theconcepts
conceptsofofproducer’s
producer’srisk,
risk,consumer’s
consumer’srisk,
risk,sample
sample
size,
size,and
andmaximum
maximumdefects
defectsallowed
allowedtogether
together
1
The
Theshape
shapeoror
0.9 α = .05 (producer’s risk) slope
slopeof
ofthe
the
Probability of acceptance

0.8 curve
curveisis
0.7 dependent
dependenton onaa
n = 99
0.6 particular
particular
c=4
combination
combinationof of
0.5 the
thefour
four
0.4 parameters
parameters
0.3  =.10
0.2 (consumer’s risk)
0.1
0
1 2 3 4 5 6 7 8 9 10 11 12
AQL LTPD
Percent defective
 77

Example: Acceptance Sampling Problem

Zypercom,
Zypercom, aa manufacturer
manufacturerof of video
video interfaces,
interfaces,
purchases
purchases printed
printed wiring
wiring boards
boards from
froman an outside
outside
vender,
vender, Procard.
Procard. Procard
Procard has has set
set an
an acceptable
acceptable
quality
quality level
level of
of 1%
1% and
and accepts
accepts aa 5%5% risk
risk of
of rejecting
rejecting
lots
lots at
at or
orbelow
below this
this level.
level. Zypercom
Zypercom considers
considers lotslots
with
with 3%
3% defectives
defectives to
to be
be unacceptable
unacceptable and and will
will assume
assume
aa 10%
10% risk
risk of
of accepting
accepting aa defective
defective lot.
lot.

Develop
Develop aa sampling
sampling plan
plan for
forZypercom
Zypercom andand determine
determine
aa rule
rule to
to be
be followed
followed by
by the
the receiving
receiving inspection
inspection
personnel.
personnel.
 78

Example:
Step 1. What is given and what is not?

In
In this
this problem,
problem,AQLAQLis is given
given to
to be
be 0.01
0.01 and
and LTDP
LTDP
is
is given
given toto be
be 0.03.
0.03. WeWe are
are also
also given
given an
an alpha
alpha of
of
0.05
0.05 and
and aa beta
beta of
of 0.10.
0.10.

What
What you
you need
need to
to determine
determine is
is your
your sampling
sampling
plan
plan is
is “c”
“c” and
and “n.”
“n.”
 79

Example: Step 2. Determine “c”

LTPD .03
= = 3
First
Firstdivide
divideLTPD
LTPDby
byAQL.
AQL. AQL .01
Then
Thenfind
findthe
thevalue
valuefor
for“c”
“c”by
byselecting
selectingthe
thevalue
valuein
inthe
the
TN7.10
TN7.10“n(AQL)”column
“n(AQL)”columnthat
thatis
isequal
equaltotoor
orjust
justgreater
greaterthan
than
the
theratio
ratioabove.
above.

Exhibit
ExhibitTN
TN8.10 So,
8.10 So,cc==6.
6.

c LTPD/AQL n AQL c LTPD/AQL n AQL

0 44.890 0.052 5 3.549 2.613
1 10.946 0.355 6 3.206 3.286
2 6.509 0.818 7 2.957 3.981
3 4.890 1.366 8 2.768 4.695
4 4.057 1.970 9 2.618 5.426
 80

Example: Step 3. Determine Sample Size

Now
Nowgiven
giventhe
theinformation
informationbelow,
below,compute
computethe
thesample
samplesize
sizein
in
units
unitsto
togenerate
generateyour
yoursampling
samplingplan
plan

cc == 6,
6, from
from Table
Table
nn (AQL)
(AQL) == 3.286,
3.286, from
from Table
Table
AQL
AQL== .01,.01, given
given in
in problem
problem

n(AQL/AQL)
n(AQL/AQL)==3.286/.01
3.286/.01==328.6,
328.6,or
or329
329(always
(alwaysround
roundup)
up)

Sampling
Sampling Plan:
Plan:
Take
Take aa random
random samplesample of
of 329
329 units
units from
from aa lot.
lot.
Reject
Reject the
the lot
lot ifif more
more than
than 66 units
units are
are defective.
defective.
 81

Question Bowl
A methodology that is used to show how well parts


being produced fit into a range specified by

design limits is which of the following?
a. Capability index
b. Producer’s risk
c. Consumer’s risk
d. AQL
e. None of the above

Answer: a. Capability index

 82

Question Bowl
On a quality control chart if one of the values plotted falls outside


a boundary it should signal to the production manager to do

which of the following?
a. System is out of control, should be stopped and fixed
b. System is out of control, but can still be operated without any
concern
c. System is only out of control if the number of observations
falling outside the boundary exceeds statistical
expectations
d. System is OK as is
e. None of the above Answer: c. System is only out of
control if the number of observations
falling outside the boundary exceeds
statistical expectations
(We expect with Six Sigma that 3 out of 1,000 observations will fall outside
the boundaries normally and those deviations should not lead managers to
conclude the system is out of control.)
 83

Question Bowl
You want to prepare a pchart and you


observe 200 samples with 10 in each,

and find 5 defective units. What is the
resulting “fraction defective”?
a. 25
b.2.5
c. 0.0025
d.0.00025
e. Can not be computed on data above

Answer: c. 0.0025 (5/(2000x10)=0.0025)

 84

Question Bowl
You want to prepare an x-bar chart. If the number of


observations in a “subgroup” is 10, what is the

appropriate “factor” used in the computation of
the UCL and LCL?
a. 1.88
b. 0.31
c. 0.22
d. 1.78
e. None of the above

Answer: b. 0.31 (from Exhibit TN8.7)

 85

Question Bowl
You want to prepare an Rchart. If the number of


observations in a “subgroup” is 5, what is the

appropriate “factor” used in the computation
of the LCL?
a. 0
b. 0.88
c. 1.88
d. 2.11
e. None of the above

Answer: a. 0 (from Exhibit TN8.7)

 86

Question Bowl
You want to prepare an Rchart. If the


number of observations in a “subgroup”

is 3, what is the appropriate “factor”
used in the computation of the UCL?
a. 0.87
b.1.00
c. 1.88
d.2.11
e. None of the above

Answer: e. None of the above (from Exhibit

TN8.7 the correct value is 2.57)
 87

Question Bowl
The maximum number of defectives that can be


found in a sample before the lot is rejected is

denoted in acceptance sampling as which of
the following?
a. Alpha
b. Beta
c. AQL
d. c
e. None of the above

Answer: d. c